MCDM, Inc - Information Technology Infrastructure - Case Study Example

MCDM, Inc - Information Technology Infrastructure Introduction MDCM is faced with a lot of problems relating to its information technology infrastructure and the way it currently communicates to its customers and suppliers. The following projects are briefly analyzed after which the portfolio application model matrix is used to assess their ability to be successful and their value to the business. Projects appropriate for MDCM In accordance with the strategic goals considered to be critical to the success of MDCM the IT projects that would be appropriate to its business based on the strategic goals of improving the information system, reducing operational cost and gaining market share are as follows: Unifying methodology and technical standards (Project A) – This is important to the strategic goals of the organization and since new projects would conform to these standards it is best that it be put in place expeditiously. Eliminating the many different standards is fundamental to the timely preparation of financial information on which decisions can be based and on which financial forecasting can be done. It will also reduce the time taken to complete projects and make the sharing of knowledge more effective. Consolidating data centers and network (Project B) – The savings of $1.1 million to be achieved from this project makes it a choice project not only for its impact on reducing cost but for achieving standardization. However, this project should be embarked on after project A is completed since it will utilize all the networking staff for a period of 6 months. Additionally, this project will not change existing systems and projects. Outsourcing nonstrategic IT services (Project C) – One of the strategic objectives of MDCM is to reduce operational cost. This project will provide that opportunity as it is a cost saving project and should therefore be considered seriously. Projections are for savings within 12 months and so this would be beneficial to the company in both the short-term and the long-term. Standardize server hardware and platforms (Project D)– Standardizing the platforms will make the transferring of information more efficient. Having just one type of server hardware and platform would reduce maintenance and support costs and this is important in reducing cost which is one of the strategic goals of the organization. Some of MDCM subsidiaries are currently involved in the standardization process and so it would be best if it is carried out simultaneously in all subsidiaries. Therefore, doing it right away is recommended. Implement enterprise resource planning (ERP) (Project E) – This project is already on the way in the United States. The project will cost the company an additional $30 million with 12 months to complete. However, even though there are uncertainties associated with this project it has implications for other projects which are critical to MDCM’s success. Create employee intranet portal (Project F) – This is a cutting costing exercise and should therefore be done. It could reduce headcount in the US by between 20 and 25 employees which have implications for lowering the salaries and wages bill. Manage the supply chain (Project G) – management of the supply chain is an important aspect of MDCM’s operations and therefore it needs to be given priority so that the company can gain competitive advantage. Dealing with a few suppliers instead of hundreds will increase MDCM’s bargaining power and that will lead to a reduction in the cost of inputs. This project is also dependent on the ERP project. The ERP project will take at least 12 months and so this project cannot be considered now even though it is critical. Streamline design systems (Project H) – It is customer oriented and therefore needs to be initiated. Tremendous payback is seen if the custom-built CAD system which is used in the UK is implemented. It would be beneficial for MDCM to go ahead with this project immediately before the French subsidiary invests in a different system or renew the current lease. This will prevent unnecessary cost and also assist in the standardization process. Improve Collaboration Systems (Project I) – This is important to the business since it facilitates the communication process which is fundamental to the effective and efficient operations of MDCM’s globally. There is currently no standard infrastructure for e-mails and this is critical as information can be communicated quickly using this channel. There is currently no corporate e-mails so this will be a plus for the organization. Begin CRM/Create Data Warehouse (Project J) – Customer relationship management (CRM) is critical to any business. However, this project is costly and should be considered after the project involving the customer service portal is implemented and the standardization process is completed. Implement e-procurement system – (Project K) – This would result in consolidation of internal purchasing. This would result in increased savings from large scale purchases. MDCM has benefited tremendously from the aggregation of material purchasing and this would further add to its fortunes. This project will take a short time period of six months and should be embarked on immediately as the benefits will far outweigh the cost. Customer self-service portal (Project L) – This project is critical to customer satisfaction. It will also lead to a reduction in the time spent by Marketing and Sales staff dealing with customers. It has already been suggested that if information was received in a timely manner the marketing and sales team would be twice as competitive and so this would definitely have a positive impact on sales revenue as well as profits. However, the project relating to the consolidation of data centers and network would have to be completed before this project is considered. Based on an assessment of the existing situation and the challenges facing MDCM, all the initiatives stated would be important in resolving the myriad problems the company faces. However, the budget would not be able to accommodate all of them immediately. It therefore means that they need to be prioritized based on their level of importance and in relation to the strategic goals of the organization. Additionally, some of them would utilize all of a specific human resource and should be considered only when the employees with those skills are not required for any other projects which are of a higher priority. The table below shows the likelihood of success and the ability to succeed of all ten initiatives. Value to the business/Ability to succeed Low Ability to succeed High ability to succeed High value Implement enterprise resource planning Unify methodology and technical standards Consolidate data centers and networks Standardize server hardware and platforms Streamline design systems Implement E-procurement system Customer self-service portal Low value Improve collaboration systems Create employee intranet portal Begin CRM/Create Data Warehouse Table 1 – MDCM’s Portfolio Application Model Matrix The information in Table 1 suggests that initiatives such as: unifying the methodology and technical standards; consolidate data centers and networks; consolidate server hardware and platforms; streamline design systems; implement e-procurement systems; and customer self-service portal have a high ability to succeed as well as a high value to the business. However, it indicates that improving collaboration systems have a low ability to succeed and a high value to the business. This is not necessarily correct as e-mails are a means of communication and communication is critical to achieving the strategic goals of the organization. The table below shows the relative scores obtained based on the weights allowed for factors used to assess the two components. Initiatives Ability to succeed Value to the business Unify methodology and technical standards 79 70 Consolidate data centers and networks 90 100 Outsource nonstrategic IT services 68 55 Standardize server hardware and platforms 69 70 Implement enterprise resource planning (ERP) 22 85 Create employee intranet portal 58 50 Manage the supply chain 63 100 Streamline design systems 100 100 Improve collaboration systems 32 35 Begin CRM/Create data warehouse 49 45 Implement e-procurement system 69 100 Customer self-service portal 54 100 Table 2 – Scores: Portfolio Application Model Matrix Table 2 indicates that streamlining design systems is the initiative that has the highest score and improving collaboration systems the lowest. However, these scores do not necessarily reflect the priority that should be given to the initiatives as improving collaboration systems is important to the smooth functioning of the organization. Collaboration systems can allow meetings to be held with the management of all subsidiaries involved without being at the same location. This is also a cost cutting exercise as it would eliminate the necessity to travel to a specific location. This would allow for emergency meetings to take place whenever it becomes necessary. In terms of priority, unifying methodology and technical standards should be the first initiative since it would reduce project cycles and encourage knowledge sharing across IT development teams. Additionally, it is critical to the improvement of future systems development capability of the IT organization. Furthermore, any new systems and projects would confirm to the methodology and standards. This project should be followed by the standardization of server hardware and platforms. There are several different platforms in place and so addressing this issue is of paramount importance since it has implications for other aspects of the IT organization. Streamlining design systems would follow in terms of priority since it would reduce design cycle time and improve quality control which will impact positively on customer satisfaction. Some projects can be done together while it is considered prudent and less risky for others to be done after those projects on which they are dependent for success are completed. After those three projects identified are completed the network and data centers should be consolidated. This project has to be done before the customer self-service portal is set up or its reliability cannot be guaranteed since the present network and data centers are described as being antiquated. The company’s e-procurement system can be implemented while the customer self service portal is being set up if the resources exist. No cost was stated for the e-procurement system and the customer self-service portal and so it is important that the cost be ascertained in order to determine their feasibility at this time. Managing the supply chain is important because it has implications for customer service. However, the cost of $12.3 million may be prohibitive based on an IT budget of $56.5 million. Additionally, it appears as if it is dependent on the implementation of the ERP system which caused earlier delays. This would make the project risky since the ERP project is considered risky because of the uncertainties involved and based on the difficulty in coordinating the project among the different local IT groups. Therefore, projects related to improving collaborations systems as well as unifying methodology and standards may be critical to its success. Outsourcing nonstrategic IT services and creating intranet portal can be done at anytime but it would be best if they are done after the first three initiatives noted above are completed. Conclusion Which projects are to be done first is not only dependent on priority but also the availability of human and financial resources. These factors are critical to the success of the total IT project. It therefore means that prioritizing them is not an end in itself but a tool to be used in conjunction with resource availability to determine which projects will be initiated first. Although standardizing the platforms and systems may be important $56.5 million will definitely not be able to do the job as there are currently several platforms and systems in use. It may therefore be beneficial to start projects with low cost, that is capable of being completed within a short time but will realize benefits in the short term. These include the implementing the e-procurement system, outsourcing nonstrategic services and creating an employee intranet portal. In order to gain market share which is a strategic objective it is also important that a project that will impact customer service be included among the early initiatives to be implemented. Works Cited Jeffrey, Mark and Norton, Joseph F. (2006). MCDM, Inc. (B): Strategic IT Portfolio Management. Kellogg School of Management. Read More